Financial Fair Play: Failing The Underdog

Created on 12 Sept, 2014 6:38 PM GMT

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The UEFA Financial Fair Play regulations are in the news again this week, after Michel Platini gave in to the demands of the European Clubs' Association to commit the fines from FFP back into the game.

The problem stems from the fact that the wrong clubs are reaping the benefit. Nine clubs were fined up to $182m for failing to act in accordance with financial fair play, most notably Manchester City and Paris St Germain. The first $32m is being divided between the compliant teams that competed in the 2013/14 UEFA Champions League and UEFA Europa League, which is partly where the problem lies. Does Real Madrid need another $340,000? Would the non-qualifying teams benefit more from a larger slice?

There were 182 teams that failed to advance past the qualifying rounds, they didn't get the full benefit of the UEFA TV deal and prize money. Sharing payments exclusively between those clubs would net them roughly $177,000 each. This would be a fair amount when you consider a club like Bala Town, whose highest ever league attendance of 938 would have seen them take approximately $7,500 in ticket sales. Manchester United make roughly that $177,000 in gate receipts on each and every Barclays Premier League home game.

Again, who needs the money more?

At this stage, UEFA have yet to finalize precisely how the money will be allocated. The model widely expected is for the bulk to be divided between the qualifying teams. Smaller payments would go to those non-qualifiers, and finally teams in the offenders' domestic leagues. Of course, this could all change if the teams can keep within FFP to reduce those huge fines, but does the concept also prevent competition?

QPR could potentially find themselves playing in the Vanarama Conference next season, if they refuse to pay a possible $60m fine for breaching the FFP rules used by the Football League to govern the SkyBet Championship. QPR are expected to make a mid eight-figure loss for their promotion season in the Championship, mostly the hangover from their previous Premier League campaign, not that they are in financial danger with the backing of Tony Fernandes and Lakshmi Mittal. The two are worth a combined $17,000,000,000 and Fernandes has shown his commitment to the Rs with friend, and former Formula One colleague, Mittal. Strangely, the Football League allows for a benefactor to cover losses in their FFP rules for SkyBet League One and Two, but not the Championship.

Had the present system been in place for the past twenty five years, the entire landscape of English football would be drastically different. Jack Walker would never have been able to plough millions in to Blackburn Rovers, to take them from what is now the Championship to win the 1994/95 Premier League title. Dave Whelan would not have been able to bankroll Wigan Athletic from the old Division Three to an FA Cup and several years in the Premier League. Likewise Mohamed Al-Fayed with Fulham, Adam Pearson at Hull City, and Sam Hammam and Peter Ridsdale, who elevated Cardiff City to cusp of the Barclay's Premier League before Vincent Tan took over. Manchester United, Chelsea and Liverpool would have all failed in previous years and the top-four would not be what it is today.

Without the allowance for those sustainable losses, the Premier League wouldn't have a product worthy of the $250m NBC Sports deal, nor the $4.85b they rake in from broadcast rights in the UK. That in turn devalues the Champions League TV deal and UEFA, who pushed through FPP, would now lose out on hundreds of millions. BT Sport would not pay $1.45b and Fox would not bid anywhere close to the $300m for their new deal.

Real Madrid would never have been in a position to bring together the Galacticos of the Beckham/Zidane era or the present Cristiano/Bale version. Much like asking someone Coke or Pepsi, Spain has a culture of Real or Barça. The national divide, between the King's team and one of the openly defiant outlets during the Franco dictatorship, pushes both teams to build the quality of their respective squads and their brands in general. Would the great rivals be able to pay for the salaries and development costs of Spain's UEFA Euro 2008, 2012 and FIFA World Cup 2010 winners?

Financial Fair Play is a system to prevent what happened at Portsmouth, and the recent trend among smaller Spanish teams. Portsmouth spent far more than they had with a small fanbase, in a tired stadium, with little prospect of securing a new home. Alexandre Gaydamek treated Pompey as a toy, assembling a squad of players that peaked the interest of Inter Milan, Liverpool and Real Madrid. When he tired of the game, he sold off everything he could and demanded the return of his investment. The system of Spanish TV rights, which heavily favors Barcelona and Real Madrid - as opposed to an equal share - has led to widespread financial problems in the Spanish game. You will occasionally see someone spend a ridiculous amount of cash to try to challenge the likes of Valencia, the Madrid clubs and the Catalans. Málaga being the most recent example, assembling an excellent squad one season and holding a fire-sale the next.

The concept of financial fair play is admirable, but it's not something that can be one rule for all. If I made millions, I would invest in my local team in England, Dunstable Town. Their 5-1 win over fellow Bedfordshire side, Arlesey Town, attracted a season-high 179 fans or a little over $2,000 through the turnstiles at Creasey Park. As a supporter I would not tire of the club and walk away, like Gaydamek did at Fratton Park, and would gladly cover all the sustainable losses, as Roman Abramovic and Sheikh Mansour bin Zayed al Nahyan do with Chelsea and Manchester City. The English authorities have their 'fit and proper persons' test, which has obviously failed time and time again, but couldn't they revamp it in order to gauge the long term interests and dedication of the applicant rather than just their financial means. Without significant investment, Leeds could never get back to the Premier League or return to their 70s heyday. Are UEFA, the Premier League and Football League contented to keep the same top four from now until the end of time?

That's not what makes the game interesting. Blackburn relying on heavily fancied Manchester United dropping points against West Ham on the final day of the 1994/95 season is. The rank outsider challenging for the title, whether it's Norwich in 1993, Watford in 1983, or any number of clubs in the past 126 seasons, is what keeps us watching. The Scottish Professional Football League has had a dire problem with the Old Firm dominance of the past quarter of a century. There is little interest in watching games outside of the Old Firm Derby, so the old SPL and SFA would encourage more ties between Celtic and Rangers. It became a tired joke when the Celts and Gers met seven times in one season, and sure enough interest faded in the diluted derby. With the financial troubles at Ibrox, as well as with the contestants of Scotland's other big derby - Heart of Midlothian and Hibernian, Celtic are left as a great white shark in a fish bowl. Who wants to watch that?

The growing problem in most nations is how the pot of gold is divided. The gap between the rich and poor is ever growing, and if that gap is growing in the Premier League, think about how that affects the Football League and non-leagues. If FFP is to become a permanent addition, why not pool the fines at European level to give to the weaker nations, and why not collect the domestic fines to distribute down the individual pyramids. The Premier League currently pays a solidarity payment to the Football League but, by the time it gets past the Championship, there isn't much left for the 48 teams in Leagues One and Two. The Conference teams don't see a penny, anyone below that certainly doesn't hold any hope. Dozens of non-league clubs go out of business each year, and these are the clubs that produce the talent that goes on to play in Premier League academies. When an average level 8 club only requires around $80,000 a year to operate with a good playing budget, could the redistribution of FFP fines help solve the losses that every country is currently suffering?

The FA have toyed with the ridiculous Premier League B team idea, mainly because the Premier League runs as a business and not to serve English football or the national team. The loan system solves the over-21s who can't get a game in the Premier League. EPPP solves the problem of Premier League clubs not wanting to pay to cherry-pick the best youth players at every smaller club, but those players have to start somewhere. With the danger EPPP presents, clubs outside of the Premier League need some form of compensation. Luton Town have built their business model around their academy, selling the likes of Jack Wilshere (Arsenal/England), Cauley Woodrow (Fulham/England U21) and Lewis Baker (Chelsea/England U20) in recent years. Under EPPP, those millions dry up, and therefore so does much of the revenue that keeps the club going.

Taking money with one hand, and giving with the other, is a little better than taking money with one hand and waving a large wad of dollar bills with the other. Some Premier League chairmen have even suggested doing away with the pyramid to save those clubs the embarrassment of going bankrupt, but if you start losing the blocks at the base of a pyramid, what is left to hold up the top? Big teams and leagues can look after smaller teams in a number of ways, prestige friendlies, loans, facility sharing, coaching partnerships etc. Perhaps it's time for the larger teams and competitions to stop reminiscing about the 'football family' and start acting like one. That is fair play.